Scunthorpe haulage business in legal dispute with Bradford steel firm which called in bailiffs

Clugston leases a site in Scunthorpe from Barrett, which it uses as the main base for its operations.

Its particulars of claim document in the case states that the firm had a Company Voluntary Arrangement agreed by creditors in February, with the CVA required to repay a historic debt to HMRC while allowing the business to continue to trade.

The claim states that Barrett then served notice on Clugston on the grounds that the CVA was an act of insolvency entitling it as landlord to re-enter the property under the terms of the lease.

The claim states that after the notice was received on the afternoon of Friday February 28, at around 1.15am on Sunday March 2, bailiffs instructed by Barrett entered the property and changed the locks.

The claim argues that the forfeiture was “wrongful [and] invalid” and Barrett had therefore trespassed on the property as Clugston was not given a reasonable amount of time to either remedy the alleged breach or consider its response to the legal notice.

It adds that Clugston was allowed back into possession of the property on the evening of March 4 following Clugston lodging a legal case.

The claim states that the situation caused Clugston losses due to factors including compensation claims for delayed deliveries, the termination of “some” haulage contracts, the loss of favourable payment terms with suppliers, staff giving notice as a result of the forfeiture and reputational damage to the business.

A defence and counterclaim statement by Barrett denies the company was obliged to provide further time and that the act of entering the CVA triggered a right to forfeit the lease.

The statement said Barrett makes no admission in relation to the alleged losses.

Barrett’s counterclaim states “the forfeiture by the defendant [Barrett] was valid and the claimant is not entitled to relief from forfeiture” and seeks possession of the property, as well as damages for the use and occupation of the property from the point at which Clugston re-entered up until any court order on possession is given.

Alistair Clugston, of Clugston Distribution Services, said the situation impacted his company’s ability to meet its obligations to clients, including the Mini Cooper car factory in Oxford.

He said: “We’re back up and running and our clients, suppliers and my team have been superb. They could all have done without this, but they and the town of Scunthorpe have rallied round and now it’s about repaying that faith.”

Lynn Yin, a senior lawyer at international law firm Asserson which is advising Clugston Distribution Services, said: “It was a privilege to witness the tremendous support for Clugston in the local community. We were pleased to be able to support Clugston in getting back on site as soon as possible.”

Barrett Steel and its legal firm Shoosmiths did not wish to comment.